Gymshark's Marketing Success: A Digital Marketing Case Study Analysis

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Marketing Plan- Gymshark
Principles of Marketing
NAME OF THE STUDENT:
name of the university:
AUTHOR’S NOTE:

MARKETING PLAN –GYMSHARK
Executive Summary
The purpose of the study is to understand how online companies strategize marketing operations.
Marketing strategies are different on online platforms in comparison with traditional marketing.
This paper will underline this difference and showcase the ways by which online marketing
companies operate.
To understand the concepts better this paper will has taken Gymshark as an example and will do
a case study of the company. It will study its existing structure and apply marketing principles
like PESTLE, Porters 5 Forces. It will do a SWOT analysis of the company and will suggest 3
marketing objectives for the company to pursue. It will develop a marketing strategy based on
Segmentation targeting and positioning. Finally, it will discuss how the marketing mix 4Ps will
help improve Gymshark growth and market share.
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MARKETING PLAN –GYMSHARK
Table of Contents
1. Introduction..................................................................................................................................3
2. Preparing an Environmental and Competitor Analysis...............................................................4
2.1 Brief History of Gymshark....................................................................................................4
2.2 PESTLE Analysis of Gymshark............................................................................................4
2.3 Porter’s 5 forces:....................................................................................................................6
3. SWOT Analysis of Gymshark.....................................................................................................7
4. SMART Marketing Objectives:...................................................................................................8
5. Segmentation Targeting and Positioning (STP)..........................................................................9
5.1 Segmentation.......................................................................................................................10
5.2 Targeting..............................................................................................................................10
5.3 Positioning...........................................................................................................................11
5.4 STP of Gymshark for the future..........................................................................................11
6. Marketing Mix 4 Ps...................................................................................................................12
7. Conclusion.................................................................................................................................15
References......................................................................................................................................16
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MARKETING PLAN –GYMSHARK
1. Introduction
Traditional marketing has many layers that were: the manufacturer, the distributor/ wholesaler,
retailer and finally the consumer. For the last 2 decades or so, a new marketing platform has
emerged that has done away with all the traditional way of selling. This is the digital marketing
or online marketing channel. Traditional marketing is very costly and requires huge capital
investment; it was also geographically limited so there was an inherent cap on growth.
The online marketing is cost efficient and at the same time global. It is given rise to a whole new
group of young entrepreneurs who have grown very successful very fast.
Gymshark and its CEO Ben Francis is one such success story that this paper will use as a case
study. Whilst studying the company, this paper will paper will apply marketing concepts on the
digital marketing platform and bring a marketing plan for a digital marketing company. The
objective of this marketing plan is to suggest ways to improve Gymshark’s growth and market
share.
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MARKETING PLAN –GYMSHARK
2. Preparing an Environmental and Competitor Analysis
2.1 Brief History of Gymshark
Gymshark was founded in 2012 by Ben Francis who found that gym apparels were designed for
those who already had big physiques and not for teenagers. He designed clothes that would fit
the slim bodies of youngsters who have just started going to the gym. Six years later the
company has 215 employees, 1.2 million customers spread in 177 countries. Total sales for the
year ended 2017 were £40.5 million. One of the reasons for its success is that it is online and
direct-to-customer which makes it nimble and quick to react to market demands. It also is not
weighed down with costs (Gymshark 2019).
2.2 PESTLE Analysis of Gymshark
PESTLE is an acronym for Political, Economic, Social, Technological; Legal and Environmental
factors that a company needs to consider when it is its growth phase. PESTEL is often used in
conjunction with other tools like Porters 5 Forces and SWOT analysis. It is used to understand
the macro-environmental factors that will have a fundamental effect on the company’s
performance.
Figure 1: Gymshark Logo
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MARKETING PLAN –GYMSHARK
(Source: Gymshark 2019)
Political factors: Takes into consideration the government’s intervention or support in the
economy or industry.
For Gymshark Government campaigns have been boosting the number of people who are being
consistently health conscious is a positive sign. On the negative side there is tremendous
uncertainty in UK because of Brexit and there is great political instability that will be persist
throughout the year (Haemers 2016).
Economic factors: The economic performance, growth rate of the economy, exchange rates,
disposable income, unemployment rates are considered under this head. This has a direct impact
on the long-term prospects of a company.
It is necessary for Gymshark to consider the economic downturn in recent years and the rise of
unemployment though this trend is reversing slowly (Haemers 2016).
Social factors: Takes into account the population trends, age and income distribution, career
prospects, health consciousness and cultural barriers etc.
On the positive side there are an increasing number of people in the age group of 30+ onwards
who are being encouraged to take sporting activities. Though sedentary life style is also
increasing (Haemers 2016).
Technological factors: This is volatile environment especially for a digital marketing company
like Gymshark; where technological changes are happening at a rapid pace. Its impact can be
either positive or negative. If Gymshark remains updated then it is a positive in case of
complacency this can have a negative effect (Gymshark 2019).
Environmental factors: Are those that will affect the natural environments such as carbon
emission, pollution, scarcity of materials, sustainability and CSR etc.
There is an increasing pressure to reduce carbon footprint. There is also social pressure on
having fair prices. This is a positive for Gymshark as its prices are very fair (Rothaermel 2015)
Legal factors: The country is seized with strict health and safety regulations. UK also has in fair
wages laws and manufacturing conditions laws in position. Gymshark has to be careful or else it
will invite unnecessary legal suits (Haemers 2016).
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MARKETING PLAN –GYMSHARK
2.3 Porter’s 5 forces:
Competition in the industry: There is a huge competition in the industry for apparels and clothing
which cater to the tastes of the youth. Some of them are Missguided, ASOS, Boohoo and many
others. However they are currently selling fashion brands like Nike and Adidas to the youth.
These branded goods are costly.
Gymshark is the only one to exclusively sell sports ware and that are manufactured by them.
They sell them at very affordable prices. This is their niche, but it can be attractive to the
competition.
Potential for new entrants: In the online marketing platforms there are always going to be new
entrants as this model is quite cost-effective and does not need heavy investment. Gymshark
started on a shoe string budget so can the others (Rothaermel 2015).
Power of suppliers: The fabric used for sportswear is abundant and this is not a major concern
for Gymshark.
Power of the consumers: As already stated above not only young, but the elder people are also
being health conscious. There will be an increasing demand for the products of Gymshark in the
years to come.
Threat of substitute products: Gymshark is a niche product it is clothes used in a gym or at most
informal wear. There is little threat of substitutes replacing gym clothes.
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MARKETING PLAN –GYMSHARK
3. SWOT Analysis of Gymshark
Strengths Weakness
Brand name is established and
customers identify with them No mobile phone app.
Fastest growth in terms of sales Rising costs of delivery
Social Media presence 2.4 M on
Instagram & 1.5 M on Facebook Only one model of business- Online
Online advertising model - Using
well-known influencers Very young team
Fast financial transactions done
through online banking
Manufacturing is outsourced (Lower
costs)
Opportunities Threats
Artificial Intelligence and chatbots
applications
Brexit is one issue that will hamper
growth of UK at least in short term
Having some physical locations Threat of new comers.
New markets like Australia, India.
Wearable technology
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MARKETING PLAN –GYMSHARK
4. SMART Marketing Objectives:
SMART is another acronym for Specific, Measurable, Assignable, Relevant and Time-bound.
From the above information there are 3 specific marketing objectives that the Gymshark can
pursue.
Develop a mobile app:
Today’s youth carry their mobiles on their person and are forever fiddle with it. Research tells
that most users spend 145 min on the phone and are engaged in 76 sessions per day. In US this
number is higher going up to 3 hrs. 35 mins spent daily on the phone (Emanuel et al. 2015)
Gao et al 2015 have listed the benefits having a mobile app, some of them are:
Market Directly to Customer: Since the customers have them on the phone on their person,
accessing becomes easy and there is no need to wait for them to go on to the computer or laptop.
They can place an order from the phone.
Increase Customer Engagement: Gymshark can conduct surveys; ask for referrals, offer
discounts or issue promo codes to engage customer engagement
Build Brand Recognition: Gymshark already has considerable following on the social media,
having an app will increase recognition.
Finally, it is not a very costly investment to develop an app. Gymshark’s app can be up and
running in a matter of day and will start generating revenue immediately (Rothaermel 2015).
Have a physical store:
The time is ripe for Gymshark to have at least one physical store so that the over-abundance on
online marketing is diluted somewhat. In 2017 Gymshark had a huge problem when during the
Black Friday week the Magneto platform crashed for 8 hours and they had to incur huge losses.
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MARKETING PLAN –GYMSHARK
Figure 2: Gymshark Website Crashed
(Source: Benedict and Keteyian 2019)
The problem was rectified, but having a physical store would have mitigated the loss somewhat.
The store need not be a monstrosity, with a huge footprint; but something modest in a high street
of London or New York will do well.
Having their own courier company:
It is very well known that the most expensive part of the ecommerce is the delivery. It is in this
time the customer can change his/her mind and cancel the order. Amazon prime has recognized
this and promised delivery within a day and in some cases within a few hours. They are able to
do so, as they do not outsource the delivery to the couriers, but have their own fleet called
Amazon Shipping. In the long run the Gymshark can consider having this as one of the
marketing objectives (Benedict and Keteyian 2019).
5. Segmentation Targeting and Positioning (STP)
According to Hegner and Getkate (2015), STP is a framework which scrutinizes and summarizes
the process the market segmentation. It is used to understand how the buyers are divided and
profiled according to different variables.
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MARKETING PLAN –GYMSHARK
5.1 Segmentation
Hegner and Getkate (2015), said that Gymshark is a brand that appeals to the fitness conscious
youth who fall within the age group of 18 to 25.
5.2 Targeting
Apart from fitness they are also interested in music and fashion. Both males and females are in
the customer demographic. Their income is around €13,000 p.a. to € 26,000 p.a. They are mostly
white collar in the junior level management. They value freedom, work-life balance, want to
have an exciting life. Most of them are single and do not have any children as yet. Their careers
have just started. They are technologically ahead of their senior colleagues (Hegner and Getkate
2015).
Figure 3: STP Analysis
(Source: Hegner and Getkate 2015)
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MARKETING PLAN –GYMSHARK
5.3 Positioning
Gymshark has done well to price most of its gym ware within the price range of £20 for vests
and to £80 for parkas. This suits well with the consumer demographic (BBC News 2019).
5.4 STP of Gymshark for the future.
This has been the STP so far, which has already taken the company so far. However one of the
points mentioned in the social factors in PESTLE was the rise in the people of all age groups
who are getting interested in a healthy life-style.
People from all walks of life are getting stressed and burnt out at a very young age. They take up
habits like smoking, eating junk-food or drugs and drinking. The work-life balance in corporates
is almost non-existent. Most people have started to recognize that the only way to beat the circle
of stress and burn-out is get fit and have a healthy life-style. Gymshark needs recognize that
these people also can be their customers (Benedict and Keteyian 2019).
The market will have a higher income levels and therefore disposable income. People who buy
Gymshark clothing will continue to be white collar people and continue to be upwardly mobile,
fashion and brand conscious.
For this demographic the influencers will have to be older sports persons for example Tiger
Woods won 2019 Golf Masters on 15th April. This was after a hiatus of 11 years. It has been
labelled the Greatest Comeback in Sports History (Benedict and Keteyian 2019).
The new demographic too will have seen failure like layoffs, accidents, illness, divorce etc. They
will be able to relate with such influencers and would like to sport the same clothes as their idols
much like the younger customers do today (Marketing Week 2019).
Currently the clothes made by Gymshark are suitable for youths, the size range is not available
for larger sizes, but they could start a plus size range of clothes for those who want to go back to
the gym.
Success stories of these senior customers can also be linked on the social media and Gymshark
could sponsor their YouTube channel.
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